Does Biofuel deserve the bad press?

Source: Energy Digital

Date :18/06/2008 15:59:52

In a recent report by New Energy Finance Ltd, Biofuel is argued to not be the main problem in the 244 percent increase in staple food prices since 2004.

The report claims that increases in input costs have played a much larger role. It also stated that the strain of population growth was a key factor.

New Energy Finance analyzed food price increases from 2004 to 2008, breaking them into constituent factors: input costs, dollar depreciation, supply/demand factors and speculative activity. This is expected to ease back, however, when the underlying supply/demand situation stabilizes.

However, the UN commission acknowledged that biofuels are more CO2 neutral than fossil fuels but warns that land use, food supply and water supply issues need to be taken into account when planning for the production of biofuels. Jacqueline Cramer, Minister for the Environment and Spatial Planning of the Netherlands said: "It is important to grasp the economic benefits of using biomass for tackling climate change, while at the same time, avoiding biodiversity loss and competition with local food production

Meeting

On the June 3, global leaders gathered at a three-day UN meeting in Rome, to discuss the world's food crisis. There were disagreements regarding the production of biofuels and whether it is contributing to the rocketing prices that are causing food shortage and instability around the world.

The President of Brazil, Luiz Inacio Lula da Silva stated: "It offends me to see fingers pointed against clean energy from biofuels, fingers soiled with oil and coal." Frederic Mousseau, a policy adviser at Oxfam contributed that: "Food stocks are at their lowest in 25 years, so the market is very vulnerable to any policy changes."